Dow at Records, Rest of Market Retreats, in Close to Strong July

Stocks were mixed on a choppy Monday, July 31, though equities looked to close out a solid month.

The S&P 500 fell 0.05% and the Dow Jones Industrial Average was up 0.25%, hitting a record high of 21,894 earlier in the day. The Nasdaq declined 0.2%.

The Dow clocked a new record on Friday, July 28, for the its third day in a row, though the S&P 500 and Nasdaq fell short of their own. The latter two had closed at records earlier last week. The S&P 500 was on track for a 1% increase for the month, the Dow a 2.3% gain, and the Nasdaq an increase of 3.8%.

Apple Inc. (AAPL) will dominate a jam-packed earnings calendar this week with its earnings report on Tuesday, Aug. 1. The world’s largest company is expected to post earnings of $1.57 a share during its quarter that ended in June, a 10% increase from a year earlier. Sales are forecast to have climbed nearly 6% to $44.9 billion.

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Sohu.com Inc. (SOHU) jumped 10% on a quarterly revenue beat and solid outlook. Revenue of $461.17 million was up nearly 10% from a year earlier and exceeded estimates by $26.5 million. A net loss of $1.85 a share was 27 cents steeper than anticipated. For the third quarter, Sohu anticipates revenue between $480 million and $510 million, higher than $474.6 million consensus.

HSBC said pretax profit for the first six months of the year wast $10.2 billion, up 5.15% from the same period last year. Revenue for the first half was $26.2 billion, down 11% from last year “primarily due to currency translation differences, the absence of fair value movements on our own debt and revenue from the operations in Brazil that we sold,” HSBC said.

The bank also said it would add a further $2 billion to its existing share buyback program, taking it to $5.5 billion since the second half of 2016.

American depositary receipts of HSBC were rising 1.8% on Monday.

Crude oil prices traded above $50 overnight before settling lower to trade under that level again. The earlier bump was tied to Organization of Petroleum Exporting Countries’ decision to meet next week to discuss why some members were falling short of a commitment to limit output. The countries will convene in Abu Dhabi on Aug. 7-8.

West Texas Intermediate crude was down 0.8% to $49.31 a barrel early Monday.

Dynavax Technologies Corp. (DVAX) surged nearly 75% higher after a Food and Drug Administration advisory panel ruled on Friday afternoon that data supports the safety of its hepatitis B vaccine. The positive ruling set off a string of analyst upgrades on Monday. JPMorgan upgraded to overweight from neutral and increased its price target to $26 from $7. RBC Capital upgraded to outperform from sector perform.

Jefferies downgraded its rating on Coach (COH) stock to hold from buy on Monday morning. The firm said the positives it highlighted in its previous “buy” rating have now been priced into the stock. These positives included the power of the brand, the Kate Spade acquisition, and the expectation of a strongly executed turnaround.

Snap Inc. (SNAP) fell 2.7% on Monday as the lockup period expired for its early investors. Around 400 million shares are now able to be sold as of Monday. A general employee blackout period will expire on August 14 wherein 782 million more shares could be sold.

Business activity in the Chicago region declined to its lowest level in three months. Chicago PMI dipped to 58.9 from 65.7, dropping at a faster pace than an expected retreat to 61. However, the measure was higher for its seventeenth month in a row. Sentiment declined for the first time after five months of increases.

Pending home sales rose for the first time in four months, according to the National Association of Realtors. The pending home sales index increased by 1.5% to 110.2, faster than an anticipated 0.9%. Gains were broad with only the Midwest seeing a small dip. The measure monitors sales in which a contract has been signed but deal not yet closed.

The U.S. flew two B-1B bombers across the Korean peninsula on Saturday, July 29, the latest in rising tensions in Asia. The move was in reaction to North Korea launching another missile on Friday. The launch, possibly of an intercontinental ballistic missile, was detected by Japan and South Korea and later confirmed by the U.S. Defense Department. President Donald Trump passed the North Korea issue off onto China in a string of tweets on Saturday.